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what can be claimed on tax

posted 2015-May-16, 2:58 am


I work at Woolies and I'm not sure exactly everything I can claim on tax. I've kept my reciepts for work boots, pants, etc. This is about $200 worth.

I've been taxed just over $2000 and want to maximise the amount I'll get back. I know I'll get back the amount I paid for work things, plus SDA fees and last years accountant fees but this only comes to about $600.

posted 2015-May-16, 6:32 am

Firstly, well done for keeping receipts. If you have more than $300 of deductions (which you say you do) and you get audited by the ATO (any time in the next few years,) you'll need them. I am not an accountant, and this is not tax advice, but my understanding is as follows:

It's important you realize you probably won't get back the whole $600 you paid for work things. You need to understand the difference between a "deduction" and a "refund."

Your expenses (totaling $600) reduce your taxable income by that amount. These are called "deductions." The amount you get back when you do your tax return (how much tax you've actually paid less how much tax you should have paid) is called a "refund" (or a bill, if it turns out you haven't paid enough tax and owe the ATO money.) Saying "I know I'll get back the amount I paid for work things" is probably inaccurate.

Making a few assumptions that your tax is relatively simple (you are an Australian Resident of Tax Purposes for the whole of the financial year, you're an employee instead of a contractor, this is your only job and you've claimed the tax-free threshold etc,) the following is how the system generally works:

Throughout the financial year Woolies will have been automatically taking a certain amount of tax out of your pay and giving it to the ATO on your behalf (the amount based on how much they expect to pay you for the financial and what the tax rate is for that level of income.) When you fill out your tax return, you're making the ATO aware of why shouldn't have paid that much tax, by telling them about your deductions.

Eg Woolies know (based on your weekly earnings) that you'll likely earn $30k for the financial year, you've claimed the tax-free-threshold of $18200, so you'll need to pay income tax of 19% on the remaining $11800: $2242. Woolies therefore take out $2242 of your pay (spread out over 52 weeks, so about $43 per week, or whatever your pay frequency is) and give it to the ATO on your behalf. At the end of the financial year you do your tax return and tell the ATO that

you've needed to spend money ($600) to make money: you have some deductions. These deductions totaling $600 mean that your taxable income should only be $30000-$18200-$600: $11200, and therefore you should have only paid $2128 in tax, not the $2242 that Woolies have taken out, and in fact you've over-paid $114. If the ATO agrees with you (decides your deductions are legit) they give you back the $114. This $114 is the refund. Notice that the $114 refund (amount you get back) is less than the $600 expense (amount you paid, the $600 deduction.) These numbers don't include LITO or the medicare levy etc.

The more deductions you can claim, the more your taxable income reduces, the more tax you've over-paid, and the bigger refund you'll get.

Deductions that you can potentially claim working for Woolies include laundering of work uniform ($1 per load, which includes washing, drying and ironing if it's only your work uniform in the machine, or $0.50 if there are other non-work clothes in there too,) mobile phone, transport and self-education expenses (though they depend on exacly what your job with Woolies actually is. If you work in Head Office they might apply, if you work nightfill in a store then it's likely you'll only be able to claim laundering the uniform, the other deductions almost certainly won't be applicable.) Have a look at this page for a list.

Looking at the laundry example, doing 2 loads of washing per week, every week, of mixed clothing would be 2x52x$0.50 = a $52 deduction. Your taxable income would reduce a further $52 from $11200 to $11148, so you'd then need to have only paid $2118 in tax, instead of the previously calculated $2128. That $52 deduction has resulted in a $10 refund, not a $52 refund. If your washing was more expensive than that (eg you had it dry-cleaned) you can claim the more expensive deduction, as long as you've got the receipts to prove it. Also be aware of claiming deductions for 52 weeks of the year. If you took 4 weeks annual leave in blocks of 1 week or more then it's likely you didn't launder your uniform during that time, so you might only be able to claim laundry for 48 weeks of the year (a $48 deduction instead of $52.) If you took your AL as one day here, one day there and were actually washing your uniform every week then you're back to claiming for 52 weeks.

Due to the LITO your total refund could end up being close-ish to the $600, but that's because the offset exists, not because you automatically get a 100% refund on all deductions: a deduction is not a refund. It also doesn't take into account the medicare levy.

Category: Taxes

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